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Boeing (BA) Q3 Commercial Delivery Up 7%, Ahead of Airbus

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The aerospace giant The Boeing CompanyBA reported strong third-quarter as well as nine-month 2015 delivery numbers. The company delivered 580 commercial jetliners so far this year, increasing 9.8% year over year and beating its archrival Airbus. On Monday, Airbus reported that it has delivered 446 planes in the first nine months of this year.

Boeing's total deliveries in the quarter jumped approximately 5.6% year over year. Its share price edged up 1.1% to close at $134.02 yesterday.

In the third quarter, Boeing delivered 199 commercial airplanes compared with 186 deliveries a year ago given continued growth for its 787 Dreamliner and Next Generation 737 single-aisle jetliners. The Next Generation 737 model continues to be the pillar of Boeing's strength in the commercial airplane sector with deliveries of 126 airplanes, followed by its 787 Dreamliner model with 37 deliveries, pumping out at over 12 a month.

The company expects a total of 135 Dreamliner shipments for 2015. In the year-earlier quarter, the company had delivered 120 units of the 737 and 31 units of the 787 model.

Boeing also delivered 27 777s during the third quarter, flat with the year-ago period.

Meanwhile, Boeing's deliveries in the defense and space business numbered 48 in the third quarter of 2015, on par with the prior year. Total deliveries in the quarter consisted of 16 AH-64 Apache helicopters (both new and remanufactured) and 15 Chinook helicopters (new and renewed). The company also delivered 8 F/A-18 jets, 4 P-18 models, 3 F-15s and 2 C-17 Globemaster III.

Demand for Boeing's commercial airplanes is on the rise owing to the steady improvement in passenger and freight traffic especially in the emerging markets. In its recently released outlook, Boeing anticipates the commercial fleet to double over the next two decades to 43,560 airplanes, fueled by sustained 4.9% annual growth in commercial passenger traffic. About 40% of the total commercial demand is likely to come from the Asian markets, another 40% from Europe and North America, and the balance from the rest of the world.

However, Boeing, which is slated to release its third quarter 2015 numbers on Oct 21, is likely to suffer a huge competitive disadvantage because of the non-renewal of the Export-Import Bank's (Ex-Im) license.

Boeing has in the past significantly benefited from the support it received from the Ex-Im Bank. After boosting U.S. exports for nearly eight decades, the credit agency's charter finally ended in Jun 2015. The closure of the Ex-Im Bank is undoubtedly a setback for Boeing as a substantial portion of its foreign orders was guaranteed by the bank. About 15% of Boeing's customers used Ex-Im financing. Although it may not create any near-term financial risk, it might hit Boeing's long-term global competitiveness.

Zacks Rank

Boeing currently has a Zacks Rank #2 (Buy). Some of the other well-placed players in the aerospace and defense industry include General Dynamics Corp. GD , Lockheed Martin Corp. LMT and Northrop Grumman Corp. NOC , all with a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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